Aug 17, 2007
Statistics show auto insurance reforms have delivered $6.8 billion in savings
Toronto, Ontario – A report from the Insurance Bureau of Canada (IBC) says that consumers in Ontario, Alberta and Atlantic Canada have benefited from nearly $7 billion in auto insurance premium savings since insurance reforms were implemented in 2003 and 2004. The analysis is based on the latest data from the General Insurance Statistical Agency, a government body that collects data on premiums recorded for every private passenger vehicle in those regions.
IBC says that after nearly four years of declining auto insurance premiums between 2003 and 2007 in provinces with private auto insurance delivery, it is important to provide both a summary and regional breakdown of the savings delivered to consumers. The breakdown is as follows:
- In Ontario, average premiums have decreased from approximately $1,499 per vehicle in November 2003 to $1,260 in June 2007, a reduction of nearly 16 per cent. Key reforms include getting people with whiplash-related injuries into treatment faster; ensuring greater fairness among the fees of health care providers operating within different parts of the system; providing greater consumer protection against sometimes-unscrupulous paralegal representatives; reinforcing that the purpose of auto insurance is to direct needed crash victims to treatment, rather than cash settlements that may not be applied to rehabilitation; and making sure that the focus of court access for further benefits is on claimants that have suffered serious and permanent injuries.
- In Alberta, Canada’s second-largest private auto insurance market, average premiums dropped from a peak average of $1,182 in 2004 to $1,021 in 2007, a decline of nearly 14 per cent. Reforms include a $4,000 limit to the pain and suffering court awards for minor injuries, but with more money allocated for care required to return a crash victim to health; unchanged pain and suffering awards for more serious injuries; and a direct-to-insurer billing system that permits injured crash victims to obtain treatment with no delays.
- In Nova Scotia, average premiums dropped from $1,048 in November 2003 to $800 in June 2007, an average reduction of nearly 24 per cent; in New Brunswick, averages dropped from $1,259 in 2003 to $797 in 2007, a reduction of nearly 37 per cent; in Prince Edward Island, premiums dropped from $881 in 2003 to $745, a reduction of nearly 15.5 per cent; and in Newfoundland and Labrador, average premiums dropped from $1,126 in 2003 to $887 in June 2007, a reduction of 21 per cent.
- Governments in Nova Scotia, New Brunswick and PEI introduced a limit of $2,500 for compensation paid out for pain and suffering awards for minor injuries; awards for more serious injuries were not affected. New Brunswick introduced a first-chance discount to give young drivers a break on their coverage as long as they maintain a clean driving record.